Virtually everyone has times when emergencies come up and paying later just isn’t an option. That’s when it’s important to understand how lenders work and which ones are able to provide borrowers with fast loans right away. If you’re in need of money now, many of the traditional lenders may not be able to help.
Different Lenders Fill Specific Needs
Lenders tend to cater to specific clients and fill rather narrow segments of borrowing needs. That simply means one lender may offer longer-term loans with very low risks involved. Others specialise in shorter-term consumer loans for items like automobiles and home improvement products. Still, others work with clients who may never have established credit or who have experienced financial problems in the past.
Payday lenders fit into a niche all their own. When an emergency arises and cash is short, fast loans can help borrowers resolve an immediate cash flow problem. This allows for loan repayment once they receive their next pay cheque. When a vehicle repair needs to be dealt with immediately, a payday loan might be the best way to resolve the problem.
Advantages of Fast Loans
One issue facing any borrower is time. While, in some cases, paying a bill or making a purchase can wait, far too many times the cash is needed quickly. That means waiting for most traditional lenders to approve a loan is not an option.
If you’re planning to purchase a new vehicle, for example, it’s relatively simple to contact lenders ahead of time to find one offering a set of terms that’s ideal. Yes, it’s possible to walk into an automobile dealer and get financing through the dealer quickly, but the terms available might not be the best. Finding the best option will probably require a few days, and that’s fine when the purchase isn’t an absolute necessity.
The same thing is true when purchasing furniture or other durable goods. It pays to shop around not only for the best prices but also for the best financing terms. Short-term loans vary dramatically from one lender to the next, suggesting buyers are generally better off when they take time to explore all their options.
However, when the car needs to be repaired today or the need simply can’t wait, there may be no option but to locate and take advantage of a lender who can approve fast loans and transfer the funds without any delays. That’s when a payday lender is the best choice for borrowers.
Drawbacks of a Payday Loan
The primary disadvantage of fast loans could be their costs. Borrowers must be aware that the interest for a payday loan generally falls between 20 and 35 percent, which can translate to an APR of 1000 percent or more.
Borrowers far too often begin to rely on payday loans, and the costs involved can quickly eat up a pay cheque, making it even more difficult to pay bills the next month. That results in a never-ending cycle of borrowing and repaying loans just to get through the month.
The last major disadvantage is the fees added should a borrower fail to repay the fast loan on time. In those cases, the fees involved escalate rapidly, making an already expensive borrowing option, even more costly.
It’s also important to deal with a lender you trust. While most lenders are honest, there are a few that won’t fully disclose all the details of a payday loan. Carefully reading all lending documents prior to signing will reduce the likelihood of misunderstandings. If you’ve got questions, asking them and getting satisfactory answers before accepting the loan is strongly recommended.
Understanding the Process
Borrowers need to fully grasp how lenders operate before taking any additional steps. Doing so provides a level of protection, as it allows them to understand the services provided by lenders and the costs involved differ from lender to lender. The interest rates for payday loans can be very high at some lenders, and the maximum loan amounts will vary. Borrowers are always encouraged to check out the lender’s fees prior to borrowing.
It’s also important to understand that every lender is required to check a borrower’s credit rating prior to providing a fast loan. Traditional lenders generally put a great deal of emphasis on credit scores, often denying loans to anyone with a spotty credit history.
Payday lenders, on the other hand, tend to be more lenient, but credit scores still matter, so it’s always important to repay loans promptly. While payday lenders will loan money to those with lower scores, past repayment histories can play a role in the amount the lender is willing to provide. Repaying fast loans promptly will, as a rule, make it easier to obtain payday loans in the future, so lenders encourage borrowers to make sure they never borrow more than they will be able to repay on time.
How do I apply?
Applying for fast loans is generally easy. Online applications make it possible for borrowers to obtain a decision almost immediately. If a lender has questions, they can be addressed quickly to make sure the borrower’s needs are filled. Once the application is approved, the money is transferred to the client’s account quickly, assuming the bank has the ability to accept the transfer the same day.
The online application process is, in a way, safer for many borrowers. The documentation is there for borrowers to inspect, and there is no lender sitting across a desk pushing for a fast signature. Taking the time to read the lending agreement is important to ensure you fully understand the details of the loan. If there are questions about a specific clause, it’s easy to get a quick answer to that question.
Is Refinancing of Payday Loans Possible?
Although there are lenders who may provide rollover loans or refinancing, those lenders tend to be more costly. Don’t borrow money using a payday loan with the expectation of rolling it over. This is usually just too expensive and does nothing to resolve a borrower’s long-term financial needs. If repaying the fast loan on time is going to be an issue, it’s far better to deal with the cash flow problem in some other way. Speaking to your lender about this in an open and honest way is always the best place to start, to get the most specific help for you.
Payday Loans Are Not Long-Term Solutions
While most borrowers are responsible and repay their loans promptly, others tend to find themselves borrowing money month after month. This is often just to take care of recurring expenses. In short, payday loans could be extremely helpful when emergencies occur.
We encourage clients to develop healthy financial habits to minimise the number of times high-cost payday loans are needed. Saving money is often difficult. However it always pays to develop a habit of putting a percentage of every pay cheque into a savings account.
There are several agencies available to help anyone experiencing financial difficulties. They help you to develop strategies that will keep debts under control. If you’re in need of financial advice, it pays to take advantage of the UK Financial Ombudsman, StepChange, or The Money Advice Service.
If you’ve got questions about your rights as a borrower, Citizens Advice has the answers you need. They’ll provide the advice you’re looking for to deal with mortgage issues, other debt solutions, and even how to borrow money.
Exploring Other Lending Options
There are many types of loans available. Planning ahead can help any borrower get the money they need for short, intermediate, and long-term needs. This will also help you to avoid taking out emergency loans in the future.
Try discussing your financial circumstances with any of the agencies mentioned earlier. They’ll certainly explain the advantages of responsible borrowing to deal with your needs. By planning purchases ahead, it’s possible to minimise their overall costs. Using the optimal financing method for each type of purchase will keep costs low and keep the monthly payments affordable.
Fast Loans from Direct Lenders
If you’re in need of a loan, check the options provided by MoneyBoat. We offer payday loans to meet your immediate needs. When you are in need of fast financial help, we’re here to provide the funding you require.
MoneyBoat is a responsible lender. We follow all regulations to the letter and ensure our clients get the money they need without any unnecessary inconvenience. Yes, we will check your credit score before offering you a loan. However we also understand our clients may have been through rough times that contributed to a lower-than-average credit score.
We also encourage you to contact our lending team if you need additional information or have questions about payday loans. We’re a direct lender, which means MoneyBoat can respond to your application quickly.
The exact amount of money we’re able to lend depends on your credit score and pay scale. Generally, we’re able to help our customers get past those short-term monetary hurdles that come up unexpectedly. If you need a fast loan, contact MoneyBoat for help today.